Satya Nadella Microsoft CEO

Satya Nadella, Microsoft CEO

Nadella's First Quarter: Microsoft Sees Big Cloud Boost

Microsoft's third quarter financial results show strong cloud momentum for both Office 365 and Azure offerings.

Microsoft (MSFT) CEO Satya Nadella's first quarterly financials call makes the new Redmond head honcho look pretty good, particularly within the cloud realm. Microsoft noted that during its third quarter, the cloud helped to drive significant momentum in revenue, and both Office 365 and Azure contributed to the company's success.

"This quarter's results demonstrate the strength of our business, as well as the opportunities we see in a mobile-first, cloud-first world," Nadella said in a prepared statement. "We are making good progress in our consumer services like Bing and Office 365 Home, and our commercial customers continue to embrace our cloud solutions. Both position us well for long-term growth. We are focused on executing rapidly and delivering bold, innovative products that people love to use."

Microsoft showed its successes and setbacks in various areas, but when it comes to the cloud, the company noted it experienced good growth. The overall commercial segment experienced 7 percent growth, but Office 365 and Azure showed the strongest growth.

Office 365 revenue grew by more than 100 percent, and Microsoft noted that commercial seats more than doubled during the quarter. Azure revenue growth was even more impressive, with the cloud service experiencing 150 percent growth.

Such growth is expected for a while, as Microsoft's cloud services continue to gain traction in the market, but expect that to eventually level off to a more steady and consistent increase.

But for now, the growth of Office 365 is being attributed to "strong enterprise momentum for Microsoft's cloud productivity solutions." As for Azure, Microsoft announced more than 40 new features in the hopes of attracting additional cloud application developers.

Microsoft isn't the top dog in the overall cloud space, but the company has a strong cloud strategy. The appointment of Nadella as CEO earlier this year just shows how important the cloud is to Microsoft. It still has a big battle to fight against competitors Amazon Web Services (AMZN) and Google (GOOG), but there's every indication Microsoft is making huge strides in the market.

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